The Debt Inheritance: How America’s $38T Tab Could Reshape Work, Wages and the Next Generation

Note: This article is written in the style of Ray Dalio and is not authored by him.

Introduction — The Balance Sheet We’re Passing On

Imagine a ledger stretching across generations. On one side are the assets we build: schools, infrastructure, technology, businesses, human capital. On the other side is the cost we carry—debt. Today that cost is roughly $38 trillion. The number itself is jaw-dropping, but what matters more is what a society chooses to do with such a burden and who pays for it.

One possible path is familiar and blunt: print money, inflate away the real value of debts, and pass the bill—disguised in higher prices and weaker purchasing power—onto future generations. That is the dark scenario that has been sounded repeatedly. If that path were taken, the consequences would ripple through workplaces, compensation, corporate strategy, retirement planning and the very meaning of work.

How Printing Money Becomes a Burden on Work

When a government expands the money supply to cover obligations, the immediate result is not only higher nominal spending but an erosion of the currency’s purchasing power. For workers and employers, the channels are straightforward:

• Real wages fall. If wage growth is slower than inflation, workers lose purchasing power. In real terms, earnings stagnate or decline even when nominal pay rises.
• Pensions and fixed incomes weaken. Retirees and those with defined-benefit plans feel a double squeeze: their payouts don’t keep up with rising costs, and employers confront larger funding gaps.
• Companies face cost uncertainty. Price instability makes budgeting, long-term planning and capital allocation harder—especially for labor-intensive firms.
• Raises and benefits negotiations intensify. Workers look to employers to protect living standards, pushing firms toward indexation, more frequent adjustments or cost-of-living clauses.

These are not abstract macro facts; they are the lived realities that change career decisions, retirement timing, and the attractiveness of certain industries. A devalued currency shifts incentives: people prefer tangible, productive assets or skills that pay in real terms; firms prefer flexibility and hedges that protect margins.

For Employers: Choices and Responsibilities

Employers will not be passive. They will make choices that protect their balance sheets and competitive positions—choices that affect employees. Here are paths firms are likely to take and how leaders can think about them:

• Price adjustments and margin protection. Companies with pricing power will pass on nominal increases to customers. Those without will trim costs, and the easiest budget lever is often labor—through hiring freezes, reduced raises, or slower benefit growth.
• Shift toward real-asset investment. Firms may pivot to investments with intrinsic value—logistics, real estate used productively, intellectual property—assets that protect against currency erosion.
• Productivity focus. When real wages are under pressure, firms that can raise productivity will thrive. That means investing in automation, training, and processes that raise output per worker.
• Compensation design. Expect creative packages: profit-sharing, indexed wages, more equity components, or benefits tied to inflation benchmarks. Such changes require transparent communication and shared governance.

There is a moral dimension embedded in these business choices. Firms that shortchange employees to protect short-term profits may preserve margins but erode trust and long-term talent competitiveness. Those that align incentives, protect living standards where possible, and invest in human capital will be better positioned for the long arc of economic adjustment.

For Workers: Practical, Strategic Responses

If the future holds higher inflation as a way to reduce the real burden of debt, workers can prepare by strengthening their personal resilience. Practical steps include:

• Focus on real income growth. Prioritize roles and industries that offer the potential for raises above inflation: technology, health services, specialist trades, and roles tied to real productivity improvements.
• Build inflation hedges into personal finances. This doesn’t mean speculative gambles. Consider diversified holdings including real assets, inflation-protected securities where available, and a mix of domestic and foreign exposures.
• Invest in skills that increase productivity. The most durable hedge is to be more valuable: technical skills, managerial competence, and the ability to learn new systems are currency in any environment.
• Plan retirement with scenarios. Don’t rely purely on nominal promises. Stress-test retirement plans for different inflation and interest-rate paths. Seek options that index benefits to cost-of-living or adjust allocations toward assets that preserve real value.
• Negotiate for protection. Where possible, ask for compensation structures that protect real pay—cost-of-living adjustments, performance-linked bonuses that reflect company health, or equity that benefits from real price appreciation.

These steps are pragmatic, not panicked. They are about adaptability: keeping skills current, diversifying risks intelligently, and having an informed dialogue with employers about shared risk management.

Public Policy and the Workplace: Where the Two Meet

Printing money to tip debt dynamics is ultimately a policy choice. So is investing in the capacities that make an economy more productive and resilient. For the workforce, the most important public-policy levers are those that increase long-term productivity and distribute the benefits fairly:

• Education and retraining. Public investment in continuous learning and skill conversion reduces labor-market friction and makes higher real wages sustainable.
• Infrastructure and childcare. These are productivity multipliers that enable more people to work productively and invest in their careers.
• Pension design and protections. Policies that encourage funding discipline in retirement systems, and that protect retirees from sharp purchasing-power losses, can reduce intergenerational inequities.

Workplaces are where policy meets people. Employers who partner with government and communities to deliver training, flexible work arrangements, and benefits that respond to real needs will be part of the solution rather than contributors to the problem.

Intergenerational Ethics: What It Looks Like to Be Responsible

We cannot avoid the central ethical question: if debt is devalued through inflation, is it acceptable that today’s consumption becomes tomorrow’s burden? Some argue that shared prosperity now, at the cost of diluted future purchasing power, is a reasonable social contract—especially if today’s spending builds productive capacity. Others see it as an abdication of stewardship.

For the Work news community—leaders, managers, employees—the ethical call is clearer and actionable. Stewardship means:

• Investing in productivity-enhancing measures rather than short-term consumption alone.
• Designing compensation and benefits that share risks fairly between employer and employee.
• Building institutions that maintain intergenerational fairness: transparent pension funding, responsible debt management, and investments with long-term payoffs.

These are the practices that make an economy resilient and that ensure the ledger doesn’t become a generational hand-me-down of scarcity.

A Call to Action: Leadership, Resilience, and Opportunity

There is reason for sober realism—and for optimism. The scenario in which debt is quietly eroded through inflation is only one path among many. The alternative is deliberate action: aligning fiscal responsibility with investments that raise productivity and widen opportunity. That path requires difficult political choices, yes, but it also requires leadership in the private sector and solidarity in workplaces.

For the community of those who work, manage, and build organizations, the opportunities are real. Those who invest in human capital, create compensation systems that protect real livelihoods, and lead with long-term perspectives will be the magnet employers of the next decade. Workers who sharpen their skills, diversify their financial positions wisely, and engage in the governance of their companies and institutions will be better equipped to thrive.

Closing — Build, Protect, Share

Here’s a simple framework to carry forward: build productive capacity, protect the value of livelihoods, and share the benefits across generations. Treat the $38 trillion not as an inexorable doom but as a call to action. The way we respond determines whether the weight of that number crushes the future or becomes the impetus for a fairer, more productive society.

Workplaces are where this response takes shape. They will be the laboratories of policy, the engines of innovation, and the places where intergenerational contracts are forged and honored. Act with clarity, plan with scenarios, and lead with the conviction that strong institutions and empowered workers together can turn a heavy ledger into a springboard for lasting prosperity.